Mr. Warren Barnes reports

PIVOT TECHNOLOGY PROPOSES EXCHANGE OFFER TO HOLDERS OF SERIES A PREFERRED SHARES

Pivot Technology Solutions Inc. has received board approval to move forward with a formal exchange offer to holders of its Series A preferred shares.

Under the terms of the offer, the company proposes to allow holders of Series A preferred shares to tender to the company all of their Series A preferred shares for exchange for subordinated redeemable notes that can, in part, be exchanged into common shares of the company (based on an exchange price of 40 cents per share). The notes are to be issued by Pivot's wholly owned subsidiary ACS Acquisition Holdings Inc. and will be guaranteed by Pivot Technology Solutions Inc. The notes will have a four-year term and bear interest at an annual interest rate of 8 per cent, payable quarterly on the last day of each calendar quarter. The notes will be mandatorily redeemable at quarterly intervals over a four-year period. In addition, the notes may be redeemed at the option of the company after the second anniversary at a price equal to 110 per cent of the principal amount and after the third anniversary at a price equal to 105 per cent of the principal amount (in each case, together with accrued but unpaid interest).

Once completed, the exchange offer will result in the following changes to the company's capitalization:

If all Series A preferred shares outstanding as of the date of the release are tendered for exchange, $35.5-million principal amount of notes will be issued.

Up to a maximum of one-third of the outstanding notes can be exchanged into common shares on the basis of 40 cents per share, limiting the maximum number of common shares that can be issued under the conversion to 29,560,667, subject to the right of holders to exchange up to all outstanding note principal and unpaid interest into common shares at 40 cents in the event of a default by the company in its obligations under the notes.

Upon issuance of the notes, the stated amount of the preferred shares will be largely reclassified from shareholders' equity on the company's balance sheet, at a value to be determined in accordance with international financial reporting standards accounting standards.

Preferred shares not tendered for exchange will be converted into common shares on a one for one basis.

In the event of a default at maturity (as defined in the indenture relating to the notes), noteholders will have the right to seek the repayment of up to 20.5 per cent of the original issue amount of the notes with the balance (or, at the option of each noteholder, 100 per cent of their then-outstanding unpaid notes) to be satisfied by exchanging unpaid notes for common shares.

Warren Barnes, chief executive officer of Pivot, stated: "We believe the offer represents a balanced solution to satisfy all stakeholder needs. Firstly, it will create more visibility on our capital structure and, depending on the level of participation, could reduce potential dilution by as much as two-thirds. Secondly, it provides holders of the preferred shares, who have been strong supporters of the company throughout its formative years, with an instrument that allows them to participate as shareholders in the future of the company, while at the same time providing a definitive path to liquidity."

The terms and conditions of the notes and of the exchange offer will be described in a circular to be mailed to holders of Series A preferred shares and will be made available on SEDAR.

The exchange offer will be made by way of a formal bid in accordance with applicable securities laws. The bid circular is expected to be mailed to all holders of Series A preferred shares by Dec. 20, 2013, and will remain open for 35 days. The exchange offer will be subject to customary conditions, including approval of the TSX Venture Exchange. Management anticipates completion by Jan. 31, 2014.

We seek Safe Harbor.